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Saturday, November 14, 2009

Quick summary....Chart of Charts....popped bullish on the 5DMA on this weeks action.

CO'C is now neutral. Almost always...the indicators go from bullish to neutral and then to bearish. Once in a while, they will go bullish to neutral, and then roll back into bullish. Do a visual inspection of the previous chart of charts to see this pattern.

So the conclusion? No joke here, the market might go up or might go down. Since everyone's indicators show 1120 as a S&P target, I would say it is unlikely to go right there. The big wildcard is the USD and our trusted leaders have an influence on that by rhetoric and control of the money supply/free money handed out to Banskta's. So it's a wildcard.

I also have some really great data on earning results, total market, then broken down by sector. It basically shows that most companies beat their estimates, although most companies made less in 3Q than in 2Q and basically 2Q stunk to high heaven. I hope to find time to chart this data in way to have it make sense.

I spoke with 4 people today ( 1 investor, 3 "normal" people) who while discussing the recession, all volunteered ---"and the government is lying to us, trying to make us have confidence, even though things are really lousy".

Some FET (Financial Entertainment Television) Spokesperson compared Current Unemployment to Employment as a Basketball to a Quarter. An absurd comparison, showing how deep the rabbit hole runs. This is not just about being optimistic, they are trying to deceive. A more fair comparison would be a Tennis Ball to a Ping Pong Ball.

Tuesday, November 10, 2009

It takes less than 10 minutes for me to review counts of bullish and bearish charts, but takes quite a bit of time to create the multichart compilation I call Chart of Charts.

After my quick review I decided to publish today, since any unusual event happened today. The 20 Day Moving Average of Bulls and Bears did a crossover today, to the Bearish. Somewhat odd, since today a large number of bear and bull chart both brokeout. However, a prior 20 day ago larger bullish count fell off the moving average, and since the bear average was low, the number of bear breakouts today pushed the average up, thus creating the crossover.

So don't get too all excited for the bearish case. Particularly since the 5DMA and the 10DMA have both outperformed the 20DMA. From memory, the 5DMA had a 58% annualized rate of return on betting the crossovers, and the 10DMA about 52%. The 20DMA, because of the whipsaw nature of the market and in particular a slow reaction to the V bottom in March performed at more like 28%.

The 10DMA still says bear.

Refer to my previous chart a few days prior that has more annotations to help you understand the 3 layer heatmap which is intended to not just provided bear bull signals, but levels of how to scale into and out of bullish to bearish position and vice-versa.

The IHS pattern mentioned last week has been satisfied on it's measured move. All that says is don't expect more upward movement BASED ON the IHS. Other factors will NOW determine up or down.

Volatility remains high. The number of stocks ready to breakout is a relatively large number.

The thesis is lack fast money is jumping from sector to sector as a topping process occurs. This is causing many bearish and bullish breakouts at the same time.

Sunday, November 8, 2009

See last link, its quick data analysis on Green Mountain Coffee Roasters GMCR earnings, chart of course at bottom

By the way, the name of the little German Shepherd "mascot" of Hawaii Trading is Hanako von Grunenberg, which means Flower Girl of the Green Mountain ( Indeed, a Japanese speaking German Shepherd, and also speaks "dog")

The earnings data is from a site I have dreamt of... historical earning data in tabular form, easy to copy to Excel, etc. Thanks to Annamall for pointing out this site.

And finally, this trade idea also from Annamall, she is predicting upside...after all this is a bear market bull rally...and those 42% of the population who have jobs still want coffee! Its a gamble for sure, but limited risk, high reward --that's the name of the game.

This one took about 3 hours to put together. It is about as clear as I can make it. Unfortunately the conclusion is not clear. Volatility is potentially huge. We could have a big rally or a huge down.

Keeping current positions is not a bad decision. Huge swings will clear stops. Going to all cash is fine also, however, when the turn comes, I bet it is fast...10% in 3 days, and then no one jumps in waiting for the "correction", which never really happens.

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